Two key Republican senators today offered controversial sources of funding to support federal R&D programs they said were necessary for the U.S. energy future.

Speaking at a Department of Energy innovation summit, Sen. Lamar Alexander (R-Tenn.) said he would work to transfer federal spending from renewable energy subsidies to energy research and development, while Sen. Lisa Murkowski (R-Alaska), ranking member of the Senate Energy and Natural Resources Committee, said she is working on legislation to create an “advanced energy bank” from the revenue of expanded drilling leases.

“I would take $12 million in the subsidies to wind to begin to double energy research,” Alexander said today after a speech at the Advanced Research Projects Agency-Energy (ARPA-E) fourth annual Innovation Summit at the National Harbor in suburban Washington, D.C. The senator, who has criticized wind energy subsidies in particular in the past, said during his speech that he would target “subsidies,” not just wind, as places to find funding for R&D.

Alexander praised the research and development work being done at ARPA-E on breakthrough technology that “offers market-driven solutions, not just the government picking winners and losers.” But he warned that the agency’s research and the R&D work taking place at other federal agencies were in jeopardy.

“The dollars all of you need for ARPA-E, they are in jeopardy because of entitlements,” Alexander said. “Nightmares of entitlement programs rising out of control and soaking up the money we need for energy research for higher education and for the national laboratories. That is what is happening today.”

Alexander said he would continue to support ARPA-E and would work on reauthorizing the agency before it expires at the end of fiscal 2013 in October. And while he said withdrawing the subsidies for some energy sources was important, he would not link reauthorizing the energy and research programs to switching that funding from subsidies to R&D.

Murkowski also gave great praise to ARPA-E and said that even in the current “dismal budget” environment, the United States needed “home runs, not just base hits,” in energy technology. She said she was working on making her proposal for an “Advanced Energy Trust Fund” created in part from revenues from new drilling leases into a bill with bipartisan support. The bank proposal was released earlier this year as part of her “energy blueprint.”

Murkowski noted the idea was similar to a plan from President Obama but used expanded leases for revenue. Obama’s State of the Union address proposed establishing an “Energy Security Trust” that would convert a portion of oil and gas royalties, taxes and fees to a dedicated funding stream for research that could reduce American oil dependence (EnergyWire, Feb. 14).

Sen. Ron Wyden (D-Ore.), chairman of the Senate Energy and Natural Resources Committee, said ARPA-E is “doing some of the most important work that is before the government,” especially in how it leverages private investment and partnerships. But he did not provide any support or comment about Alexander’s or Murkowski’s proposals for funding the agency.

Wyden told reporters after his speech that he and Murkowski were in “very early discussions” about revenue sharing for oil and gas but that he believes there is a “third path” that can balance people’s economic needs while protecting their “environmental treasures.” Discussions on needs for communities on forest lands are not that different from discussions in communities with fossil fuel drilling, opening an opportunity for cooperation because of “common cause,” he said.